David Sokol, a former executive believed to have been in line to succeed Warren Buffett as CEO, violated the company's insider trading and ethics policies, the board says. (AP Photo/Nati Harnik, File)

(Newser)
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Warren Buffett's former heir apparent David Sokol misled his boss and violated insider-trading rules when he bought shares in Lubrizol and then recommended Berkshire Hathaway buy it, Berkshire's board has concluded. A scathing report from the board portrays Buffett as a victim of Sokol's deception and says the company may sue to recover the $3 million Sokol made from the deal, Reuters reports.

Sokol—who insists he did nothing wrong—has resigned from the company and is the target of an SEC probe, which will gain ammunition from the board's report. "They're throwing Sokol under the bus," a corporate governance experts tells Bloomberg. Buffett is facing questions about his oversight of managers, but analysts believe the board's report will take some pressure off the billionaire investor ahead of Berkshire's annual meeting this weekend.